Tuesday

The California Assembly recently passed Senate Bill 94, a bill that aims to protect homeowners from loan modification scammers. However, does it end up having the unintended consequence of eliminating a homeowner’s ability to retain an attorney to help them save their home from foreclosure.

The bill, which included an “urgency clause” and was set to start immediately. SB 94 prevents companies, individuals, and even attorneys… from getting up front fees or any other form of compensation until after the Loan Modification has been completed.

Supporters of the bill say that the state is currently over run with scam artists who take advantage of homeowners desperate to save their homes from foreclosure by charging exorbitant up front fees and then failing to deliver anything of value in return. In their opinion, by making it illegal to charge up front fees, they will be protecting consumers from being scammed.

While there’s no doubt that there have been unscrupulous companies that have taken advantage of homeowners in distress, the number of these “con artists” is unclear. It was time for something to be done, but does SB94 fix or worsen the problem?

Supporters, state that homeowners will still be able to hire attorneys, but that the attorneys will now have to wait until after services have been rendered before being paid for their services. They say that attorneys, just like real estate agents and mortgage brokers, will now only be able to receive compensation after services have been rendered.

People who oppose the bill on the other hand say, “Getting a lender or servicer to agree to a loan modification takes months, sometimes six or nine months. If I worked on behalf of homeowners for six or nine months and then didn’t get paid by a number of them, it wouldn’t be very long before I’d have to close my doors. No lawyer is going to do that kind of work without any security and anyone who thinks they will, simply isn’t familiar with what’s involved. Real estate agents get paid through escrow, where is our security”

Take a look in the future…California’s ALT-A and Option ARM mortgages are just beginning to re-set, one third of these types of mortgages are still set to adjust in the next 24 months! This will cause homeowners payments to rise, and with almost half of the mortgages in California already underwater, these homeowners will be unable to refinance and foreclosures will increase as a result.

Does SB 94 end up reducing the number of legitimate firms available for homeowners to turn to? Will SB 94 actually stop con artists from taking advantage of homeowners in distress? Or will it end up only stopping reputable lawyers from helping homeowners?

Friday

The short sale of real estate is not a questionable practice in today's softening real estate market, it may be a necessity. The short sale transaction is a legal and much more beneficial alternative to foreclosure or even bankruptcy. Lenders are motivated to accept short sale offers to for a number of good reasons. The short sale of your home can result in a win-win-win situation for all parties involved

Our latest short sale success was on a property that had 3 mortgages and over 5k in back HOA payments!

1st Lender: Wachovia2nd Lender: Wachovia3rd Lender: Dyckoneal

Our team was able to negotiate with all lenders to agree to the short sale terms and pay off ALL the HOA arrears!

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This Blog (RealEstateBlog360) is intended to be a general discussion only, and must not be considered legal advice. Your use of it does not create an attorney-client relationship. Any liability that might arise from your use or reliance on these blog posts, or any of its links, is expressly disclaimed. This blog is not legal, loan, accounting, or tax advice, and is not to be acted on as such, it was outdated the moment it was written, and is subject to change without notice. If you are dealing with a potential real estate investment, foreclosure, short-sale or any other type of transaction, you are advised to consult the appropriate licensed professionals.